$100 million N.J. deli scheme leads to federal charges against a man and his son
Also: SEC Charges Father-Son Duo and Associate in Market Manipulation Schemes Resulting in a New Jersey Deli with a $100 Million Valuation (Securities and Exchange Commission)
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Source: NBC News
$100 million N.J. deli scheme leads to federal charges against a man and his son
Your Hometown Deli in Paulsboro made under $40,000 in annual revenue. It was the sole location for Hometown International, which had an eye-popping market value.
Sept. 26, 2022, 4:09 PM EDT
By Dan Mangan, CNBC
Three men were charged with fraud and other crimes in a scheme involving a company that was worth $100 million in the stock market despite having only a small-town New Jersey deli to its name, federal authorities said Monday.
The three men — James Patten, 63, of Winston-Salem, North Carolina; Peter Coker Sr., 80, of Chapel Hill, North Carolina; and Peter Coker Jr., 53, of Hong Kong — were charged with 12 counts, including conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices. Patten and Coker Sr. were arrested Monday. Coker Jr. is still at large.
Federal prosecutors said Patten is also charged with four counts of manipulation of securities, four counts of wire fraud, and a count of money laundering. The men were also accused of market manipulation by the U.S. Securities and Exchange Commission.
Your Hometown Deli, the business at the center of the probe, was located in Paulsboro, New Jersey, over the Delaware River from Philadelphia. The deli, lauded for its cheesesteaks and Italian subs, made under $40,000 in annual revenue and closed earlier this year. The parent company, Hometown International, had merged with a bioplastics company. E-Waste also merged with another company last year.
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Read more: https://www.nbcnews.com/business/business-news/100-million-nj-deli-scheme-leads-federal-charges-father-son-rcna49496
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Source: Securities and Exchange Commission
SEC Charges Father-Son Duo and Associate in Market Manipulation Schemes Resulting in a New Jersey Deli with a $100 Million Valuation
FOR IMMEDIATE RELEASE
2022-172
Washington D.C., Sept. 26, 2022 — The Securities and Exchange Commission today charged Peter L. Coker Sr., Peter L. Coker Jr., and James T. Patten for their roles in orchestrating fraudulent manipulative securities trading schemes. These schemes included artificially inflating the share price of Hometown International, which operated a New Jersey deli producing less than $40,000 in annual revenue, from approximately $1 per share in October 2019 to nearly $14 per share by April 2021, leading to a grossly inflated market capitalization of $100 million.
According to the SEC’s complaint, Patten, Coker Sr., and Coker Jr., who was the former Chairman of the Board of Hometown International, took control of the outstanding shares of Hometown International and a separate shell company, E-Waste Corp., artificially inflated the price of both issuers’ stock through manipulative trading, and used the entities to acquire privately-held companies in reverse mergers, with the intent to thereafter dump their shares at grossly inflated prices. Before the defendants were able to reap the intended profits of the schemes, as alleged, numerous news articles were published discussing the issuers’ inflated stock prices.
“We allege that the defendants’ brazen schemes resulted in the artificial inflation of the stock price of two publicly traded companies with little to no annual revenues,” said Scott A. Thompson, Associate Director of Enforcement in the Philadelphia Regional Office. “Such manipulative schemes diminish the trust investors must have in the integrity of the markets, and we will pursue those who engage in such wrongdoing.”
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, charges all three defendants with violations of the antifraud provisions of the securities laws. The complaint also charges Patten with violating market manipulation provisions of the securities laws and charges Coker Sr. and Coker Jr. with aiding and abetting those violations. It seeks injunctive relief, disgorgement plus prejudgment interest, civil penalties, a prohibition against participating in any penny stock offerings, and an officer and director bar against Coker Jr.
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Patten, Coker Sr., and Coker Jr.
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Read more: https://www.sec.gov/news/press-release/2022-172
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